Attacks on two oil tankers in the Middle East provided market bears with some solid ammunition for selling, but it didn't work out that way. Computer algorithms reacted to a spike in oil by pushing up futures. Oil has been weak recently on worries about economic slowing, so the logic used was that higher oil was a good thing.
That is questionable logic, but it keeps the tone of trading positive. Breadth was strong all day and finished at better than two-to-one positive. Bonds were up, precious metals found buyers and even Bitcoin attracted speculative interest. Recent initial public offerings have been seeing a lot of interest and small caps showed good relative strength. Even the moribund Walt Disney Co. (DIS) started trading like a momentum stock.
The indices are still within the trading range of the last three days, but the trading action in individual stocks was quite good. There were some good pockets of speculative action, and it is obvious that there are bulls looking to put more cash to work and the longer the S&P 500 stays above support at 2873, which is the 50-day, the better the chances that there will be retest of the highs over 2940 that were hit at the end of May.
The bears are still hopeful that slowing economic growth, trade wars and politics will come into play, but the dovish Fed is helping to prevent any downside traction from building.
This is very healthy action right now, and the chances of an upside resolution are increasing. Stay ready to put some more cash to work if it continues.
Have a good evening. I'll see you tomorrow.
Walt Disney Corp. is a holding in Jim Cramer's Action Alerts PLUS charitable trust.